Like most Americans, my Sundays consist of four things: food, friends, football and fantasy sports. Fantasy football is a large part of my week. I spend roughly 30 minutes per day reading articles and pouring over statistics on various players and matchups week-to-week to ensure I repeat as champion of my league.
Fantasy football gives me another reason to watch football games other than the Patriots. If it weren’t for fantasy football, I would have no reason to watch a Thursday night matchup between the Jacksonville Jaguars and the Tennessee Titans. It also gives me a chance to trash talk with my friends.
If, like me, you’ve watched any NFL game this season, you have definitely seen an ad for either Boston-based DraftKings or New York-based FanDuel. Both operate what are called daily fantasy sports sites. In a nutshell these websites offer a fantasy football contest that takes place over the course of one week’s worth of games instead of a season-long affair. These contests will often have huge payouts for winners, many over $1 million.
To those who are unfamiliar with DraftKings and FanDuel, players pay a fee to enter a contest, they are then asked to pick a team of players, staying under the $50,000 salary cap. After the games are over, players can collect their prize money (you don’t need to win the contest to win money).
Now, I know what you’re thinking. This sounds an awful lot like gambling. Well, that’s because it is, and recently both the Nevada Gaming Control Board and the New York Attorney General classified both as gambling operations, and have told both companies to immediately cease and desist operations in the respective states.
If both companies are operating as gambling operations, how were they able to stay legal and operate for so long? Both DraftKings and FanDuel argue that they are not gambling, but rather a game of skill. They took advantage of vague wording in the Unlawful Internet Gambling Enforcement Act of 2006. The companies argue that it takes a tremendous amount of both time and effort to find the perfect lineup week in and week out to truly have a chance at their million-dollar prizes.
Both companies are right. It does take a tremendous amount of time and effort to truly have a chance at winning their contests. A September Bloomberg article found that many of the people who are winning these million-dollar prizes are often Ivy League graduates with a penchant for numbers and statistics, exactly the kind of information daily fantasy sports deals with.
An October Washington Post article found that these “sharks” paid nearly 40 percent of the entry fees but reaped 91 percent of the profits.
These eye-popping numbers are not mentioned when the companies advertise on ESPN, nor the fact that the smaller players such as myself pay an average of $49 in entry fees and lose half of that money.
Both DraftKings and FanDuel say they will be fighting the New York Attorney General’s cease-and-desist order. After all, the companies claim to have more than 1 million customers in the state combined.
There is too much money to be made by these companies, and the states are not happy about it. Yes, daily fantasy sports are gambling for the 21st century. The fact that both companies say they are not online gambling websites is laughable. Although there may not be any cards or chips involved, people are still paying money in hopes for a certain outcome, and in return they’ll receive either the same amount of money or more.
I’m not a neurosurgeon but that’s gambling. Both companies should admit that they are online casinos. Continuing to deny this fact will only make the legal ramifications worse. Admitting that they are casinos can benefit them, and also help to take down the arcane prohibition of gambling in this country.
More states are going to try to ban daily fantasy sports, but that will not stop people from having fantasy leagues, just as people continue to bet on sports illegally. Once again, the government is getting it wrong.